Could Smart get any smaller?


More than two-thirds of U.S. Smart retail outlets have opted to stop selling Daimler AG’s microcar brand after it switches this year to offering only electric vehicles here. The shakeout will leave Smart with just 27 dealerships, fewer than even Lamborghini and Lotus.
Mercedes-Benz USA, which distributes Smart in the U.S., asked dealers to decide by the end of June whether to continue selling the ForTwo two-seater, the brand’s sole nameplate. Of Smart’s 85 outlets, 27 said they would remain, while 58 said they would move to a service-only operation, said company spokeswoman Donna Boland. Those numbers are preliminary, she said.
The 27 remaining Smart dealerships are largely concentrated in states with zero-emission vehicle mandates and that give Smart “the highest market penetration potential,” Boland said. Daimler executives had said they expected the remaining dealerships to be in cities such as San Francisco, New York, Los Angeles, Miami and Portland, Ore.
Penske Automotive Group, which launched Smart in the U.S. in 2008 as an independent distributor, is dropping sales at five of its six U.S. outlets, according to Tony Pordon, Penske’s executive vice president of investor relations and corporate development. Penske will continue selling Smart in San Diego, which has higher EV sales potential.
The dealerships that end Smart sales will continue to provide service for Smart owners. They will transition to service only as they sell out of inventory, with the “vast majority” expected to have transitioned by year end, Boland said.
Smart announced in February it would drop gasoline-powered models in the U.S. and Canada and move exclusively to EVs this summer after exhausting inventory of the old models.
The decision reflected falling sales for the ForTwo as low gasoline prices fueled demand for SUVs and crossovers. In 2016, Smart sold 6,211 ForTwos in the U.S., down 17 percent from a year earlier, for an average of 73 per dealer. Sales this year through July are down 30 percent from a year earlier, to 2,165 cars.

Exler: Sales are poised to rise.

The redesigned ForTwo Electric Drive coupe and convertible are slated to go on sale before the end of summer, still as 2017 models.
Smart introduced an electric For-Two in the U.S. in 2013. The brand’s peak EV year was 2014, when it sold about 2,600 of the cars.
Mercedes-Benz USA chief Dietmar Exler has predicted that some of the demand for Smart gasoline models will move to EVs and eventually push Smart’s overall sales after the switch “quite a bit” higher than in 2014.
Meanwhile, new gasoline-powered 2016 and 2017 ForTwos remain in stock at dealerships, according to Smart USA’s website.
The company is offering lease deals as low as $89 a month for 2016 models and $109 a month for 2017 models. Production of gasoline- powered vehicles for North America was to end in April.
Ken Schnitzer, chairman of the Mercedes-Benz Dealer Board and owner of Smart outlets in Dallas and Fort Worth, Texas, said both of his locations will end sales.
“I felt with Mercedes’ introduction of five new electric vehicles in the next several years, that these products would be a better fit for Dallas than the electric microcar,” Schnitzer wrote in an email.

Schnitzer: Both stores end sales.

Among the holdouts is Germain Motor Group in Columbus, Ohio. Executives there went back and forth over whether to continue selling Smart and ultimately decided there was enough potential for EV sales in their market.
“Columbus has established itself as a leader in electrification with its ‘Smart Columbus’ initiative,” Germain COO John Malishenko wrote in an email. “It’s well funded and focused on making Columbus a leader in alternative transportation solutions, so for that reason, we’ve decided to stay put.”
Losing 58 of its retail outlets would give Smart the smallest U.S. dealership network among brands tracked by the Automotive News Data Center. In 2016, Lamborghini sold 1,041 cars at 31 dealerships, Rolls-Royce sold 1,289 cars at 35 dealerships, Ferrari sold 2,300 cars at 37 dealerships and Lotus sold 12 cars at 41 dealerships.
Fuente: Automotive News